Elderly tax breaks could ease burden of new school

Tuesday

Feb 11, 2014 at 4:40 PM

By Philip Nazzaro

By Philip Nazzaro

At its core, economics is a study of human nature. We are individuals with our own wants, needs, and ability to spend and save. So we each make choices that make sense for us. It also means that we each place a different value on the same items. A bottle of water that costs 99 cents in a store is worth much more when you are stranded in the desert. A signed baseball that a collector would pay thousands for seems a waste to someone else. We all value items differently because we are each unique, it is human nature.

This all becomes tricky once private money becomes public money through taxation. The design of our tax system almost guarantees that nobody will be completely happy with how their money is spent. No public body can ever totally reflect how every individual would spend public money. This is at the root of our heated debate in Newmarket about our school facilities.

While there are many subtle viewpoints on this issue, the basic divide distills down to two opinions: the new school is worth the cost or the new school is too expensive. It is completely understandable that a senior citizen can support strong education in the community but not see the $44 million price tag and corresponding tax increase as worth the cost. It is equally understandable that someone who recently or currently has had (or plans to have) children in the school would justify the tax increase as worth the cost. Placing different economic values on goods, services, or facilities — such as school facilities — doesn't make us bad people, it is human nature. Regardless as to whether this current proposal passes or not, Newmarket will be spending millions of dollars on school facilities in the foreseeable future.

Though we are given very little flexibility to deal with individual economic valuation in the current tax structure, there is one tool we can use. RSA 72:39 authorizes the town to have an elderly tax exemption. For residents over 65, the town can set both the qualifying income level and amount of property value that will be exempt from taxation. I propose that in order to ease the burden of any future school facilities costs to Newmarket's senior citizens, we raise the income level to qualify for the exemption and raise the exemption to cover a large portion of any increase in taxes associated with school facilities. This is an action that the Town Council can take through passing an ordinance. The exemption requires you to submit an application so seniors that qualify but that who want to contribute to the facility simply don't have to apply. This will help our seniors who are on fixed incomes, while also allowing all our seniors the opportunity to make a personal decision on this issue, rather than being forced through taxation.

This is not a perfect solution. For those of us that are below 65 the result would be a larger tax increase — something I'm not incredibly excited about personally. We have many younger property owners in this town for whom a large tax increase would be devastating. We must continue to search for a way to ensure we take care of these neighbors. A higher tax rate would also raise the threshold for businesses to start up and stay in this town, an activity that is necessary to strengthen our tax base and provide relief to residents; we will need to find a way to mitigate this as well. There are many issues at the state level that are tying our hands in this issue, as tax relief is limited to what the RSAs allow us to do. The state mandates that we build a school larger than our growth projections and further mandates room sizes without a cent of financial backing. The state also forces us to choose from a list of approved builders and through a process that won't allow us to see the builder's bid amount until after we choose them. This artificially reduces competition and increases the price while not allowing us to factor in the enormous impact of cost to the taxpayers in our town.

Balancing the needs of the community and keeping our town affordable is a difficult task and takes all of us working together. I have read and heard inexcusably insensitive comments from people on all sides of the school facility issue. The "us versus them" mentality isn't good in national politics and it is even worse in a small community. Assuming that people that you disagree with "just don't care for kids" or "just don't care about taxpayers" is incorrect. Actually believing your concerns are the only valid ones is inexcusable in a community trying to do the best for all its residents. We are neighbors and we are in this together — let's all ensure we act like it.

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